Thursday, 27 October 2011

The Market Took That Well

Morning All

Continued promises but no new information. I really thought markets would get hit hard last night given the complete ineptitude of European leaders to come to anykind of resolution. Initially we did see a sharp fall in EUR/DAX/SP500 but this was relatively short lived as markets recovered. That kind of price action makes me feel that we could push a bit higher to make a squeaker new high around 1255/1260. Those 200day moving averages in the DOW and S&P500 look like a great target if the high isnt already in. Also note the Nasdaq is testing its previous highs and this is a clear short level with tight stops.

DOW Daily:

S&P 500 Daily:
If the high isn't already in at the 61.8, look for a possible tag of the 200day moving average.

The one key market that has steered me well throughout this crisis has been the DAX. The 3 push Ending Diagonal proved to be the low. Now this market is stalling at resistance BUT there is a potential inverse Head and Shoulders breakout pattern should this resistance break. Short first and join it if you get the signal.

DAX Base pattern:
KEY CHART. This is such a good base pattern under 6100. I think it needs a lot more "time" before the breakout does occur. Note the potential wedge and 2 indecision candles right at resistance. thus in the short term I think this sells but the bigger picture is bullish when/if this breaks.

Here in Asia we have a real mixed bag. The way Australia recovered yesterday due to the CPI figure was very encouraging indeed. Our market is now pricing in a interest rate cut and more to come. We will like this. Australia has vastly underperformed US markets but is this our time in the sun? Its tough to be bullish the region when US markets look to be topping. Thus I am not too sure currently and no new highs have been made. However, the 200day moving average does come in a lot higher from here and China/India are both looking encouraging indeed.